Major European Markets Close Slightly Higher After Cautious Session

(RTTNews) - The major European markets closed higher on Wednesday after a cautious session as investors digested hotter than expected UK inflation data and looked ahead to the Federal Reserve's monetary policy announcement due later in the day.

Although concerns about banking turmoil eased somewhat thanks to coordinated efforts by governments and central banks to rescue troubled U.S. and European banks, investors chose to stay cautious amid uncertainty about the outlook for interest rates.

Two key policymakers of the European Central Bank warned on risks posed by high inflation and signaled that they are not done with raising interest rates despite the latest banking crisis that has put the aggressiveness of central banks in tightening policy under doubt.

"With high uncertainty, it is even more important that the rate path is data-dependent," ECB President Christine Lagarde said in her speech at the ECB Watchers conference on Wednesday.

The pan European Stoxx 600 gained 0.15%. The U.K.'s FTSE 100 climbed 0.41%, Germany's DAX edged up 0.14% and France's CAC 40 advanced 0.26%, while Switzerland's SMI ended 0.1% down.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Iceland, Ireland, Poland, Portugal, Russia and Spain closed weak.

Netherlands and Norway ended higher, while Sweden settled flat.

In the UK market, Ocado Group, HSBC Holdings, B&M European Value Retail, Endeavour Mining Plc, Reckitt Benckiser, Unilever, Fresnillo, Haleon, Coca-Cola, Diageo, Relx and JD Sports Fashion gained 1.4 to 2%.

British Land drifted down 5%. Land Securities Group, Unite Group, Airtel Africa and Segro lost 2.4 to 3.7%.

In Paris, L'Oreal surged more than 2%. Pernod Ricard, Danone and Thales gained 1 to 1.5%. Air Liquide climbed nearly 1%.

Unibail Rodamco tumbled more than 7%. TotalEnergies, Capgemini and Societe Generale lost 1 to 1.6%.

In the German market, Covestro and Zalando both gained about 2.5%. Henkel, Infineon Technologies, Symrise, E.ON, Siemens, Fresenius Medical Care, Siemens Healthineers, Mercedes-Benz, Beiersdorf and BMW gained 1 to 2%.

Vonovia plunged nearly 5%. Commerzbank, Adidas, Merck, Deutsche Bank, Siemens Energy and Deutsche Telekom lost 1 to 2%.

In economic news, UK consumer price inflation unexpectedly accelerated in February after slowing for three straight months, adding to the dilemma of the Bank of England policymakers who are set to decide this week whether to raise interest rates this month in the backdrop of the financial market turmoil.

Consumer prices increased 10.4% annually in February after a 10.1% gain in January, the Office for National Statistics reported Wednesday. Inflation was forecast to slow to 9.9%.

Headline inflation had peaked at 11.1% in October 2022 to mark the highest level since 1981.

Core inflation advanced to 6.2% from 5.8% a month ago, while it was forecast to slow marginally to 5.7%.

A report from the European Central Bank said the euro area current account surplus grew at the start of the year, underpinned by an increase in the surplus on goods trade.

The current account surplus rose to EUR 17 billion in January from EUR 13.0 billion in the previous month, the report showed. The expected surplus was EUR 16.5 billion.